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India’s state-run miner NMDC (NSE: NMDC) has put its planned foray into nickel on hold partly because of global oversupply concerns in Indonesia, a country that accounts for more than 60% of global output of the metal, two company officials with direct knowledge of the matter told Reuters.
Reuters had earlier reported that India’s state-owned Steel Authority of India (SAIL) (NSE: SAIL) and NMDC were looking at boosting nickel supplies from Russia and acquiring coking coal assets.
India classified nickel as a critical mineral in 2023 and primarily relies on imports to meet demand. It is also in the process of finalising a policy to roll out incentives to process the metal, which is used by both stainless steel makers and electric vehicle battery manufacturers.
“Presently, we have kept the nickel portfolio on hold given that Indonesia is oversupplied,” the first NMDC official said.
The global nickel market is set to end 2026 in a slight surplus, the International Nickel Study Group said last week, reversing a forecast for a deficit made six months ago, with the oversupply seen widening next year.
Indonesia, the world’s largest nickel producer, has this year cut mining quotas, stepped up environmental controls and adjusted ore pricing to rein in its runaway nickel sector.
Russian assets
NMDC failed to secure a meeting with Russia’s Nornickel, despite repeated invitations, the first official said. Although the person said NMDC was interested in acquiring Russian nickel assets as well as securing supply, they did not indicate for what reason they wanted to meet with Nornickel.
Nornickel declined to comment. NMDC did not respond to a request for comment. The sources declined to be identified as plans were private.
India currently imports nickel from China, Japan, Norway and the United States, among other countries, and only very small quantities from Russia.
Nornickel, the world’s largest producer of palladium and a major supplier of nickel and copper, has not been directly targeted by Western sanctions linked to Russia’s war in Ukraine but has faced voluntary restrictions from partners, as well as logistical and payment difficulties.
NMDC said last year it was exploring acquisition opportunities for critical minerals in Africa, Australia and South America, as part of its global mineral diversification strategy.
NMDC has been evaluating overseas coking coal assets for some time. Last year, its chairman said the miner was exploring opportunities in Australia and Indonesia.
(Reporting by Neha Arora; Additional reporting by Anastasia Lyrchikova in Moscow; Editing by Kirsten Donovan)
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